Investing.com -- America Movil (NYSE:AMX), Mexico’s largest telecommunications company, posted a 48% decline in fourth-quarter net profit on Tuesday, falling well short of analysts’ expectations. The company pointed to foreign exchange losses as a key factor behind the decline, despite an increase in revenue.

The company’s US-listed shares fell 1.5% in premarket trading Wednesday.

Controlled by the family of billionaire Carlos Slim, America Movil said the weaker results were due to "a higher integral cost of financing, nearly half of which was associated with foreign exchange losses."

The company operates in more than 20 countries across Latin America and Europe. In Mexico, its largest market accounting for around 35% of total revenue, the peso weakened by over 20% against the US dollar in 2024 compared to the previous year.

Net profit came in at 9.48 billion pesos ($453 million), significantly below the $1.15 billion analysts polled by LSEG had expected in dollar terms.

Revenue for the quarter rose 18% year-on-year to 236.94 billion pesos ($11.35 billion), slightly missing the LSEG estimate of $11.41 billion.

America Movil attributed the revenue growth largely to a new accounting methodology applied to its operations in Argentina, where inflation ended 2024 at 118%. Excluding Argentina, revenue would still have climbed 10% in peso terms, aided by the consolidation of operations in Chile.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased about 16% to 91.11 billion pesos.

The company also added 2.1 million net post-paid customers in the quarter, with strong gains in Ecuador and Central America, along with 320,000 new broadband subscribers.

Commenting on the report, Jefferies analysts described it as “noisy,” but maintained an Overweight (OW) rating on AMX shares due to attractive valuation.

“We remain OW and highlight that relative to its US peers, AMX has suffered a -53% de-rating since 2023, a deeper contraction vs. the -30% relative valuation loss for the average Mexican stock,” Jefferies analysts led by Cesar A. Medina said in a note.

“As such, today, AMX is trading ~30% cheaper vs. its 2014 avg. when AT&T (NYSE:T) first announced its entrance into the Mexican market,” they added.

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